Bowhead Specialty (BOW) Q2 2024 earnings summary

Executive summary

• Gross written premiums rose 50.4% year-over-year to $175.5 million for Q2 2024, driven by growth across all divisions and platform expansion.

• Adjusted net income was $7.9 million ($0.28 per diluted share), while reported net income was $5.5 million ($0.20 per diluted share), reflecting higher loss and expense ratios.

• Completed IPO in May 2024, raising $131 million in net proceeds and began trading on NYSE.

• Maintained a strong capital position with $339.9 million in equity as of June 30, 2024.

• Over 80% of business is in the E&S market, benefiting from favorable market dynamics and absence of legacy risks.

Financial highlights

• Net earned premiums increased 46.8% year-over-year to $90.1 million in Q2 2024.

• Net investment income more than doubled to $8.8 million, supported by higher yields and increased portfolio size.

• Combined ratio was 99.3%, up from 92.8% in Q2 2023, reflecting higher loss and expense ratios.

• Book value per share increased 30% from year-end to $10.41; stockholders' equity at $339.9 million.

• Book yield on fixed income portfolio was 4.7% as of June 30, 2024; new money rate at 5.5%.

Outlook and guidance

• Management expects continued premium growth, supported by favorable E&S market conditions and expanded distribution.

• Baleen division, launched late Q2, will report its first full quarter of gross written premiums in Q3 2024.

• Tax rate expected to remain around 25.3%.

• Plans to use IPO proceeds to fund insurance subsidiary growth and general corporate purposes.

• Focus remains on underwriting profitability and prudent capital management through market cycles.